Home textile exporters may take profit hit

Lower realisations from American retailers, coupled with reduced export incentives after implementation of the goods and services tax (GST), could pull down home textiles exporters' profits by 200-300 basis points (bps) in 2017-18, says rating agency CRISIL.

Several traditional retailers in the US have pruned inventories and downsized stores to offset profit pressure caused by the e-retail boom. To cushion the resulting fall in utilisation, Indian exporters have been enhancing their share of the business with US e-retailers but at lower realisations.

Also, unlike Bangladesh and Pakistan, which enjoy duty-free access to European markets, Indian home textiles exporters' competitiveness is affected by